Thursday Watch

Around X:

• @Business

• The US military campaign against Iran has so far failed to force the regime to capitulate. The Trump administration is betting once again that suffocating economic pressure will do the job. 
• US military facilities across the Pacific are in a worrying state of decay, the Pentagon inspector general warned, raising concerns about bases that are critical to deterring China. 
• Colombia’s new conservative government is partnering with the US to fight drug gangs in its territory, Defense Secretary Pete Hegseth said. 
• South Korean stocks climbed, putting the benchmark index on track to enter a technical bull market, as a global rebound in the AI trade fueled a rapid reversal from last month’s historic rout. 
• China's aggressive tax push is sending shockwaves through financial hubs from Hong Kong to New York. 
• Bob Iger and Joshua Kushner’s $12.5 billion deal for the Lakers, which has not yet closed, would mark the highest-ever price for a sports team. 
• It’s peak driving season in the US, and gasoline and diesel prices have never been this expensive this late in the year. 
• After curbing allocations earlier this year, the $109 billion fund behind Novo Nordisk is investing again and eyeing attractively priced opportunities in the US. 
• Companies are seeing increasingly meaningful artificial intelligence adoption, but constraints on computing supply remain a bottleneck for growth, according to Morgan Stanley’s Michelle Weaver. 
• Here’s what to watch for as November approaches. 
• Here’s what you need to know to start your day.
• Get up to speed on what's moving global markets.  

• @ZeroHedge

• After today's in-line CPI print, odds of a Sept rate hike slide to the lowest in a month, down 16% to 31%. More importantly, the arb opportunity with SOFR is closing - as more take advantage - and has been cut in half in the past two weeks. 
• Tariff refunds have begun rolling in to big U.S. companies—in some cases providing a solid boost to earnings: WSJ. Among the biggest refunds reported so far: Apple, at nearly $2.2 billion; Nike, at $986 million; FedEx, at about $800 million; Amazon, at $640 million; and General Motors, at $500 million: WSJ. Refunds have contributed handily to quarterly results. Apple said its tariff refunds contributed 11 cents to per-share earnings in the most recent quarter—about 5% of the quarter’s total: WSJ. Several companies have said they’ll share refunds with customers. FedEx said it would start disbursing its $800 million in refunds to shippers and consumers in August: WSJ. 
• This is the pattern in American public health. They keep info amongst themselves (and privately make decisions for their own families with info that they don't allow us to have), even though they work for us. Thousands of examples. One of them: govt secretly met w/ vaccine makers at the beginning of the autism epidemic when the govts' own study midstream clearly linked childhood vaccines to "the entire range of neurodisorders." One scientific adviser present said he personally wasn't going to allow his new grandson to get the regular vaccines other babies were being given. Then, after the secret meeting, the public health authorities told the rest of there was nothing to be concerned over. It was just a conspiracy theory. Then, they secretly paid autism claims in vaccine court and had the landmark case sealed so nobody would know (so they hoped)... and they publicly continued to state that parents who thought vaccines caused autism were crazy, and that the link had been debunked. 
• Common Blood Pressure Drug Recalled Nationwide, FDA Says.  
• Experts Question Why Polls Were So Wrong In The Wisconsin Primary. 
• Mamdani's Socialist Utopia Collides With Reality As Manhattan Rents Hit Record.
• The Return Of Economic Gaslighting.
• New Orleans Becomes First Major U.S. City To Let AI Answer 911.
• Owner of suspiciously vacant adult daycare billed Medicaid $32M while donating to Kathy Hochul, other Dems.
• $1tn+ of buybacks. Systematics rebuilding. Retail back. Who's forced to buy higher?
• US Attorney Makes Rare Move By Convening Special Grand Jury in Washington.
• Former SPLC Exec Arrested: Accused Of Funneling Donor Money To KKK, Neo-Nazi Informants.
• Ukraine Defies Vance Warning With Massive Strike On Russia's Key Black Sea Port, Shuttering Grain Terminals. 
• Global Oil Deficit To Hit 1.8 Million Bpd This Quarter, IEA Forecasts. 
• Tanker Data Contradicts US Claim That Middle East Oil Flows Have Normalized. 
• 'All Greed-No Fear' As Bonds & Stocks Bid On Cooling CPI, But Biggest-Tech & Bitcoin Keep Sliding.

• @CNBC  

• CNBC Daily Open: Markets look past soaring U.S. budget deficit. 
• The U.S. budget deficit totaled $432.3 billion in July, the highest since March 2021. 
• Thursday's big stock stories: What’s likely to move the market in the next trading session.
• Stock futures are little changed as traders await more inflation data: Live updates.
• Stocks making the biggest moves after hours: Cisco, Jack in the Box, Cerebras, StubHub & more.
• Everything is going right for the financials sector. Why that is.    

• @WallStEngine

• COHERENT $COHR Q4’26 EARNINGS HIGHLIGHTS. Revenue: $2.1B (Est. $1.99B) ; +34% YoY. Adj. EPS: $1.74 (Est. $1.61). Gross Margin: 40.2%; +215 bps YoY. Oper Income: $446M (Est. $427M) ; +62.1% YoY. Q1 Guide: Revenue: $2.2B-$2.4B (Est. $2.14B). EPS: $1.85-$2.05 (Est. $1.77). Total Operating Expenses: $400M-$420M. Gross Margin: 39.5% to 41.5%. Tax Rate: 18% to 20%. 
• CEREBRAS $CBRS Q2’26 EARNINGS HIGHLIGHTS. Revenue: $180.1M (Est. $194M) ; +74% YoY. Core Revenue: $209.9M; +103% YoY. Gross Margin: 14% (Est. 26.3%). Core Gross Margin: 41%; +940 bps YoY. Raises FY26 Guide: Core Revenue: $880M-$890M (Est $867.6M). Core Gross Margin: 41%-43%. Core Oper Margin: -19% to -17%. 
• CISCO $CSCO Q4’26 EARNINGS HIGHLIGHTS. Revenue: $17.3B (Est. $16.82B) ; +18% YoY. Non-GAAP EPS: $1.22 (Est. $1.17) ; +23% YoY. Adj. Oper Margin: 35.9%. Adj. Oper Income: $6.2B (Est. $5.85B). Raises FY27 Guide: Revenue: $72.2B-$73.4B (Est. $68.69B). Adj. EPS: $5.05-$5.11 (Est. $4.80).  

Night Trading 

• Asian equity indices are -.25% to +2.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 67.75 -.75 basis point. 
• China Sovereign CDS 36.75 -.25 basis point.
• China Iron Ore Spot 96.0 USD/Metric Tonne +.4%. 
• Crude Oil 82.20/bbl. -1.3% 
• Gold 4,463.70 USD/t oz. -.1%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.29 -.05%.
• Bloomberg Emerging Markets Currency Index 34.45 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 129.0 +1.0%.
• US 10-Year Yield 4.68% -2.0 basis points.
• Japan 30-Year Yield 4.02% +1.0 basis point.
• Volatility Index(VIX) futures 18.1 +.7%.
• Euro Stoxx 50 futures +.34%. 
• S&P 500 futures +.02%.
• NASDAQ 100 futures +.04%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by energy and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.